Practice and client management

The Government Accountability Office wants to see better descriptions and more cost and expected performance information on the Internal Revenue Service’s new initiatives in the agency’s future budget submissions.The IRS’s budget request for 2008 includes a spending increase of almost 5 percent, to $11.6 billion, and the GAO noted that the agency’s budget proposes shifting a greater proportion of spending to enforcement, continuing a trend.

Embarrassingly for Senate Finance Committee Chairman Max Baucus, one of the loudest proponents of reducing the tax gap, two mistakes he made in recent years on his own property taxes have recently come to light.A political ad sponsored by the Montana Republican State Central Committee has brought to light local property taxes in both Washington and Montana that tripped up Baucus, D-Mont.

CCH, a Wolters Kluwer business, announced that its 2007 User Conference for tax and accounting professionals will be held Nov. 4-7 at the Gaylord Texan Resort & Convention Center.

The Association for Accounting Marketing has released its 2006 Accounting Marketing/Sales Responsibility and Compensation Survey Results. The survey was very comprehensive, and shows an interesting snapshot of where many firms are with regard to marketing.

The Treasury Department issued rules last week aimed at dismissing some of the uncertainties around Roth 401(k) plans.

The Internal Revenue Service announced that while the phase-out of the tax credit for Toyota and Lexus hybrids continues, General Motors Corp. and Nissan hybrids still qualify for the full credit.

REPORT: BETTER JOB NEEDS TO BE DONE FOR 'INNOCENT SPOUSES'

Insurance company demutualizations became popular in the late 1990s. Facilitated by revised state laws, mutual insurance companies were attracted to conversion to stock companies for the same reasons that companies have long sought to be publicly held - greater access to capital. The policyholders of mutual insurance companies were generally granted cash or stock in return for their interest in the mutual insurance company.

The Internal Revenue Service is preparing to redesign its Form 990, “Return of Organization Exempt From Income Tax,” according to published reports.

A veteran business reporter once advised me that if I really wanted to gauge the culture and future of a company I was writing on, check out their customer service department.

In recent hearings before the House Ways and Means Subcommittee on Select Revenue Measures, both the American Institute of CPAs and the New York State Society of CPAs called for the repeal of the oft-debated alternative minimum tax.

"Boomers have both unrivaled influence and rich networks of peer advisors,” says Dr. Leslie Gaines-Ross, chief reputation strategist at Weber Shandwick, one of the world’s leading public relations firms.

Lacerte users want respect from their tax software vendor. And if they don’t get it soon, they’re going to look at alternatives.

The Treasury Inspector General for Tax Administration has released preliminary data for the tax-filing season on returns received and processed as of March 10.

While the percentage of employers offering health benefit has fallen over the past five years, employers, individuals and government must share responsibility for providing heath and retirement benefits while allowing companies to remain competitive in the global marketplace, according to a study from the Government Accountability Office. In the report, the GAO examined the practices that employers are using to control the costs of benefits including * the current and emerging practices employers are using to control the costs of health care benefits; * The current and emerging practices employers are using to control the costs of retirement benefits and; * Employers' workforce restructuring changes. According to the auditor general, the share of employers offering health benefits dipped due in part to an 8 percent plunge in the small business sector offering benefits. Meanwhile, despite active participation in define- benefit plans falling from 29 million in 1985 to 21 million in 2003 as employers terminated existing plans or froze benefits for active employees, active participation in defined-contribution plans rose from 33 million in 1985 to 52 million in 2003, as employers increased their offerings of these plans. The GAO said that like health and benefits coverage for active workers, an increasing share of retiree health benefits costs is being shifted to retirees, and many employers have terminated benefits for future retirees. The study pointed out that the challenges workers face in assuming greater cost, risk, and control of their health and retirement benefits make it more difficult for low-wage earners to afford health care coverage and save for retirement -- trends the investigative arm of Congress said would continue.

The Internal Revenue Service has issued for public comment draft versions of revised Form 1120-F, U.S. Income Tax Return of a Foreign Corporation, and related schedules, including Schedule M-3, new for 2007.Taxpayers with $10 million or more in total reportable assts filing Form 1120-F for tax years ending on or after Dec. 31, 2007, will be required to file Schedule M-3. Three other new schedules for Form 1120-F include: · Schedule H, Deductions Allocated to Effectively Connected Income Under Regulations Section 1.861-8; · Schedule I, Interest Expense Allocated Under Regulations Section 1.882-5; and, · Schedule P, List of Foreign Partner Interest in Partnerships. The new schedules will provide for increased disclosure of information regarding such items as allocable interest expense and home office deductions, as well as effectively and non-effectively connected income that is included in Form K-1 reported by a partnership to a foreign corporate partner and that is reportable by the partner on Form 1120-F. The new schedules also provide a consistent reporting format for all taxpayers. In addition, Schedules M-1 and M-2, previously included in Form 1120-F, are now separate forms. Schedule M-1, Reconciliation of Income (Loss) per Books with Income per Return is used by corporations with assets under $10 million. Schedule M-2, Analysis of Unappropriated Retained Earnings per Books, is used by corporations of all asset sizes. The draft form and schedules are available on www.IRS.gov, and any comments should be submitted by May 25, 2007, via e-mail to SchM3@irs.gov.

When it comes down to it, it’s with surprisingly little debate or complaint that the general populace submit to the payment of taxes.

The Internal Revenue Service is calling for nominations to its Internal Revenue Service Advisory Council, a group that provides an organized public platform for IRS officials and public representatives to discuss relevant tax issues. Applications will be accepted from May 1, 2007, through June 15, 2007. The IRSAC is comprised of up to 30 members, who are appointed to three-year terms by the commissioner. Nominations are currently being accepted for five to seven appointments that will begin January 2008. IRSAC membership includes representation from the tax professional community such as tax attorneys, CPAs, enrolled agents, enrolled actuaries and appraisers, as well as members of the large and small business communities. More information is available on the tax professional's page at www.irs.gov.

Accounting firms are getting more creative and innovative, and many see the value in receiving independent recognition for their efforts and publicizing that fact. The innovations help improve the firm’s bottom line, and the recognition and publicity aids in attracting and retaining top talent. It also substantially enhances the firm’s brand, as existing and prospective clients see increased value in being associated with an innovative firm.

Financial Executives International, a 15,000-member body of chief financial officers, controllers and other c-level financial executives, has thrown its support behind the Senate's efforts to modify Sarbanes-Oxley's Section 404. In a letter to Sens. Chris Dodd, D-Conn., and Richard Shelby, R-Ala., the chairman and ranking Republican, respectively, of the Senate Banking Committee, FEI president and chief executive Michael Cangemi lauded their leadership in "allowing the SEC and the PCAOB to resolve the challenges of improving Section 404." Cangemi told Dodd and Shelby that FEI's position is that "Section 404 needs to be made more efficient. However, we remain encouraged that the forthcoming SEC and PCAOB guidance will achieve a greater balance in the implementation of the annual compliance process of Section 404." FEI's letter comes on the heels of an overwhelming 62-35 defeat in the Senate of an amendment put forth by Sen. Jim DeMint, R-S.C., which would have made 404 compliance optional for companies below a certain market cap. Shortly thereafter, the chamber voted unanimously 97-0 to approve an amendment from Dodd, suggesting that the SEC and the PCAOB forge ahead with their previously announced plans to develop guidance for smaller filers to make SOX more manageable.